Brussels:
The European Union warned member states on Monday to prepare for a possible complete collapse in gas supplies from Russia, urging it not to give in to Moscow’s demand that imports should be paid in rubles.
The European Commission will propose to member states on Tuesday a new package of sanctions to punish President Vladimir Putin’s Kremlin for its invasion of Ukraine, including an embargo on Russian oil, officials said.
But energy and environment ministers, meeting in Brussels on Monday, discussed the larger and possibly more complicated issue of Russia’s natural gas, on which several countries — including top EU economy Germany — depend for much of their electricity generation.
Moscow has required customers from “unfriendly countries” – including EU member states – to pay for gas in rubles, a way to evade Western financial sanctions against its central bank. It has shut down Bulgaria and Poland after their companies refused to comply.
After the talks, the French president of the meeting, Minister of Ecological Transition Barbara Pompili, and the European Commissioner for Energy, Kadri Simson, said that the 27 member states were united with Poland and Bulgaria and that they would stockpile gas to prepare for a fault.
Simson said that “following the full procedure as set forth by Russia is a violation of the sanctions” imposed by the European Union.
She said that, to her knowledge, no European company was preparing to follow Putin’s decree and change its payment methods.
– ‘Tricky’ problem –
But several countries are set to renew supply contracts by the end of May, and reports suggest some could try to circumvent the sanctions by following the method suggested by Moscow.
This would mean that a firm opens two accounts at the bank of the Russian state energy giant Gazprom. Payments would be deposited in euros or dollars in one account, then passed on to the sanctioned Russian central bank, before arriving in rubles in the second account.
Kadri and some ministers seemed to say this would still be a violation of sanctions. But other member states demanded further clarification from the European Commission’s experts.
“What happened today is that the European Commission and the presidency have confirmed that paying in rubles is unacceptable, that it is a violation of sanctions and a violation of European solidarity,” said Polish Environment Minister Anna Moskwa.
“Many countries, including the Baltic States, Denmark, the Netherlands and Finland, have reaffirmed their solidarity today and will certainly not pay in rubles,” she said.
But Sweden’s energy and digital development minister, Khashayar Farmanbar, said: “I think the clarification is still ongoing … it’s a complex process.”
“I mean, paying with one currency is one thing, but when another country’s central bank is involved, it becomes part of another part of the package, and that gets a little tricky.”
Czech Industry and Trade Minister Jozef Sikela said he had asked for a “clear explanation of how to proceed”.
At the meeting, European officials were forced to deal with media reports that Italy wants to continue paying in rubles until there is a legal alternative.
Kadri said she had spoken to Italian minister Roberto Cingolani, who did not attend the meeting, and that the report was “misleading”, but she promised to give him and all EU capitals clearer guidance on how to resist Putin’s ultimatum.
She added that Russia’s actions have shown that “they are not reliable suppliers and that means that all member states must have plans for complete disruption”.
– Used oil –
German Economy and Climate Minister Robert Habeck said Berlin would follow EU policies, but also suggested the dual Gazprombank account plan could be “a face-saving solution for Putin”.
On Tuesday, the EU will propose a gradual ban on Russian oil, but not gas, imports.
The commission will propose a gradual six- to eight-month ban to allow time to diversify supply. A senior official said there could be opt-outs for the most dependent countries, such as Hungary.
The sixth package of anti-Russian measures will also target the country’s largest bank, Sberbank, which will be banned from the international SWIFT messaging system, diplomats said.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)